2019-07-07 18:36:00 Sun ET
federal reserve monetary policy treasury dollar employment inflation interest rate exchange rate macrofinance recession systemic risk economic growth central bank fomc greenback forward guidance euro capital global financial cycle credit cycle yield curve
The Chinese central bank has to circumvent offshore imports-driven inflation due to Renminbi currency misalignment. Even though China keeps substantial foreign reserves in U.S. government bonds, traders may still speculate whether the People Bank of China (PBOC) can fix the Dollar-Renminbi exchange rate below 7.0x. This current exchange rate has substantially declined about 9.3% since April 2018 and now hovers in the stable range of 6.89x-6.92x. PBOC Governor Yi Gang indicates that there is no asymmetric red line for the Sino-American exchange rate. However, Chinese economic policymakers may be hesitant to let their currency depreciate past RMB$7-to-USD$1.
Any expectations of short-term currency misalignment can spur capital flight out of the Chinese economy. Chinese public corporations that list abroad have to make cash dividend payments in June each year; so foreign exchange order flows reveal substantive short-term pressure for these Chinese public firms to sell the offshore Renminbi. As China achieves a near-zero current account surplus in mid-2019, the Renminbi faces downward pressure. Renminbi depreciation has long been a major source of tremendous competitive advantage for China. It is important for the Sino-U.S. trade negotiations to level the playing field with respect to potential Renminbi currency misalignment.
If any of our AYA Analytica financial health memos (FHM), blog posts, ebooks, newsletters, and notifications etc, or any other form of online content curation, involves potential copyright concerns, please feel free to contact us at service@ayafintech.network so that we can remove relevant content in response to any such request within a reasonable time frame.
2018-11-30 12:42:00 Friday ET

Andy Yeh Alpha (AYA) AYA Analytica financial health memo (FHM) podcast channel on YouTube November 2018 AYA Analytica is our online regular podcast and news
2018-04-13 14:42:00 Friday ET

Mike Pompeo switches his critical role from CIA Director to State Secretary in a secret visit to North Korea with no regime change as the North Korean dicta
2019-11-06 12:29:00 Wednesday ET

Our fintech finbuzz analytic report shines fresh light on the fundamental prospects of U.S. tech titans Facebook, Apple, Microsoft, Google, and Amazon (F.A.
2017-07-01 08:40:00 Saturday ET

The Economist interviews President Donald Trump and spots the keyword *reciprocity* in many aspects of Trumponomics from trade and taxation to infrastructur
2025-06-20 08:27:00 Friday ET

President Trump poses new threats to Fed Chair monetary policy independence again. We describe, discuss, and delve into the mainstream reasons, conc
2019-10-09 16:46:00 Wednesday ET

IMF chief economist Gita Gopinath indicates that competitive currency devaluation may be an ineffective solution to improving export prospects. In the form